Market is ready for an MPS Service Distributor (II)

In our previous article we talked about the market demand of an MPS Service Distributor. Defining its role depends on its current position in the market, as the most important stuff is to ensure the addition of value to the whole distribution chain.

Technology and Know-how:

An MPS service distributor should dedicate time and resources to acquire the technology and the know-how to manage MPS. During my 11 years experience as MPS provider, I have seen profitability ratios exceeding 70%. This was thanks to the technology my team was building, in combination with the human ability to take the right decisions. Although the technology is a must (saves time, filters data, shows the needed info and more), it is not enough, and the know-how makes the final big difference.

The diversity of the behavior (lack of standardization) of the printers and copiers in the market makes the full automation of MPS services (including toner, other supplies and proactive maintenance) just not possible. A good technology would free the user by around 98% of the workload. This is why the know-how without the right technology will not exist. The reader having a deep experience on MPS is aware that while some printer/copier models can be fully MPS automated (as a matter of example, NubePrint solution provides fully MPS automation of most HP printers), for many others the printer manufacturer has “forgotten” to build the data required. And the fact is that the customer demands MPS for all its printers, and not just for some. It is due to this that a good technology and a minimum know-how make the perfect combination for a great MPS service at a much better profitability.

Acquiring the know-how requires time and experience. The more printers you monitor, the quickest you get the know-how. Of course you can always speed it up hiring a consultant. At the end, a good technology combined with know-how pays for itself. Just a simple example: imagine that you are able to save one cartridge per printer per year. In a pay per page scenario, this goes straight to your bottom line!

The need for the know-how is where an MPS service distributor gets its role defined. The distributor’s main goal is to facilitate assessment to the dealers on how to improve the usage of their customer’s printing resources, and provide the necessary support to the dealer on its MPS initiative. On its end, the dealer manages the end-customer, proposes asset replacement, bills pages while delivering supplies. The dealer is therefore the one providing MPS to the end-customer based on the “recommendations” of the Distributor.

Advantages:

The advantages of such a distribution model for MPS services are relevant:

First is that the current distribution chain of the printing business is respected: current dealers are in serious peril because of the MPS technology providing direct access to any customer, no matter where it is. Therefore the Dealer has no option but to deliver MPS directly or… loose the business.

Speed of deployment: the MPS Service Distributor know-how flows down the chain, so that the dealer just focuses on selling. Selling what? Selling services, not commodities anymore.

Larger freedom for dealer: its MPS proposal is not to be limited by the constraints of a specific technology. A dealer service offer remains independent to the printer or copier hardware vendor. Indeed the dealer can easily complete its offer by signing with more than one MPS service distributor commercializing different flavors.

Quicker ROI: the dealer entry barrier in terms of printing devices is removed, or reduced significantly. Its dedication (therefore investment) on MPS can be decided based on its return. It can buy from the MPS service distributor to compensate any lack. On its side, the Distributor spreads its costs over hundreds of Dealers, quickly reaching a positive ROI.

It is a good opportunity for the current IT distributors to increase their value proposition, and successfully enter the service business arena.

Current dealers and distributors are aware that MPS is hiding the end of the existing status quo of the printing channel distribution. The proposed role of an MPS Service Distributor let the different players work together, collaborating on making more sales by adding value to the end-customer, similar to the way they have been collaborating for the last 20 years.

The growth of the MPS business of a specific Dealer would probably motivate its decision to become distributor independent. But I honestly see this only when servicing at least 1,000 printers. So there is still plenty of room for Dealers and MPS Service Distributors to grow together, making good business and reinforcing their future.